Monday 28 May 2012 08.05 EDT
First published on Monday 28 May 2012 08.05 EDT

The National Union of Journalists has been forced to implement wide-ranging cost-saving measures, including job cuts, to avoid running out of money.

On Friday the NUJ's national executive committee agreed a raft of measures in a recovery plan to put its finances back in the black including cutting the wage bill by £400,000, restructuring its increasingly onerous pension scheme, renegotiating supplier contracts and going on a recruitment drive to boost the subscription income on which it depends.

The NUJ said without the implementation of the recovery plan, which was ratified by an overwhelming majority of its 30-plus strong NEC at a meeting on Friday, the union would have run out of money by October.

As a result of the tough economic climate facing the media industry, which has led to thousands of job cuts since 2008 and falling NUJ membership, the union said it no longer has the income to cover its £100,000-per-week running costs.

"The pro-active action is being taken with enough time to come out of the crisis as a fighting, strong, independent union," said Michelle Stanistreet, NUJ general secretary. "To do this means cutting the cloth accordingly. The NUJ has a future way beyond October. However, it is a shared goal and there is a collective responsibility to survive for our members."

The NUJ has about £300,000 in cash reserves, which would have run out by October. Stanistreet aims to see this reserve built up to £2.5m over time under the new plan.

The NUJ, which expects to make about £5m in subscription income in the year to the end of September, had forecast year-on-year falls of about 2%. However, this year the drop in income is running at about 5% and for the year to September 2013 the NUJ is now forecasting a 10% decline.

"The scale of losses of union membership thankfully does not represent the scale of job losses in the industry but it has burnt us," said Stanistreet.

The NUJ is looking to cut staff costs by about £400,000, from 53% of total subscription income to 45%. Press Gazette has reported that the NUJ is looking to cut nine out of 47 staff.

However, Stanistreet said the target is financial and the final number of redundancies depends on the pay level and seniority of those that leave. A consultation is being held with staff.

Another major issue is the NUJ's pension fund. The main scheme is due for valuation in January but the parlous state of the financial markets means that it is facing a deficit of between £500,000 and £4m.

The NUJ intends to launch a consultation into a restructure of the pension scheme, which could include looking at whether it needs to be shut.

Stanistreet said in 2008-2009 the NUJ took out a £2m loan to prop ups it pension scheme with a £1.865m investment.

"We were given assurances but unfortunately the scheme is back in a position where it seems to have only been a sticking plaster," she added. "It is a sizeable problem and we have to address it."

The next update on the progress of the recovery plan will be revealed at the meeting of the NUJ finance committee in about a month.

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